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ASSESSING THE NON-FINANCIAL INVESTMENT PROFITABILITY WITH VARIABLE DISCOUNT RATE

Katarzyna Gwozdz ()
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Katarzyna Gwozdz: Wroclaw University of Technology

Oeconomia Copernicana, 2015, vol. 6, issue 4, pages 123-138

Abstract: In the work, the subject of the discount rate assessment is presented. The discount rate is usually considered as constant in the whole investment period, which seems to be the main problem. The constant discount rate does not take into account the actual money loses value in time. Moreover, the discount rate elements can change in time, and it should be remembered that many factors, which could also change, influence the value of those elements. The research confirms that the assumption of using the constant discount rate is erroneous. In the work one can find i.a. the methods of own capital assessment or the proposal of different techniques of risk premium valuation.

Keywords: cost of equity capital; risk premium; CAPM (search for similar items in EconPapers)
JEL-codes: G11 G31 G32 (search for similar items in EconPapers)
Date: 2015
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